Francophone Africa: A Region on the Rise

Published 8 July 2024
Image of post

To date, Baobab Network has made ten investments in Francophone Africa, highlighting its promising future. Countries like Senegal, Ivory Coast, and Cameroon, are well positioned to become a significant player in the African tech ecosystem.

Here’s why we’re excited:

1. Economic Zones and Common Currencies

Francophone Africa benefits significantly from economic zones like the West African Economic and Monetary Union (UEMOA) and the Central African Economic and Monetary Community (CEMAC). UEMOA, established in 1994, promotes economic integration and stability across its member states, which include Benin, Burkina Faso, Ivory Coast, Guinea-Bissau, Mali, Niger, Senegal, and Togo. On the other hand, CEMAC, formalised in 1994 from the earlier UDEAC (founded in 1964), serves as a key economic bloc in Central Africa, comprising Cameroon, Central African Republic, Chad, Republic of Congo, Equatorial Guinea, and Gabon.

Both unions facilitate trade and investment by providing a common currency for their respective regions: the West African CFA franc (XOF) for UEMOA and the Central African CFA franc (XAF) for CEMAC. While these currencies are not interchangeable, they both succeed in their goals of reducing exchange rate risks and transaction costs within each union. This monetary stability simplifies trade and investment processes, making it easier for businesses to scale and operate across borders within these regions. By eliminating the need for currency exchange within UEMOA and CEMAC, these unions significantly increase the size of the serviceable addressable market that startups can obtain, as it fosters a more integrated economic environment, as well as a more similar consumer culture. 

2. Government Support and Policy Reforms

Governments in Francophone Africa are increasingly recognizing the importance of a robust tech sector for economic growth. Policies are being crafted to support innovation and entrepreneurship. Senegal, for example, has implemented tax incentives and streamlined regulatory processes to attract tech investments.
Additionally, regional initiatives like OHADA (Organization for the Harmonization of Business Law in Africa) are working to create a more business-friendly environment, reducing legal and administrative barriers for businesses. This will enhance the region as it positions itself as an attractive gateway to both West and Central Africa. This positioning allows startups to easily scale and access a broader market. For instance, Ivory Coast’s port in Abidjan is one of the largest and most modern in West Africa, facilitating trade and business operations across the region.  

With these supportive policies and strategic advantages, Francophone Africa is set to become a vibrant hub for tech innovation, driving economic growth and creating opportunities for entrepreneurs and investors alike. 

 3. Thriving Entrepreneurial Ecosystem

The entrepreneurial spirit in Francophone Africa is vibrant and growing. Cities like Dakar and Abidjan are emerging as tech hubs, with an increasing number of startups making headlines. 

Wave, the Senegal-based mobile money service, showcases the immense potential of the region. The company achieved unicorn status after securing a $200 million funding round in 2021—a milestone for any startup outside Nigeria and Egypt. Wave’s strategy of delivering a superior customer experience at a lower cost disrupted the market, and challenged prominent Telcos such as Orange, for market share. While often seen as an isolated success, Wave’s expansion demonstrates that startups can not only thrive within a Francophone market but also strategically grow their operations. 

Other rising stars include Jean Lobe Lobe from Cameroon with Waspito, Abdelbakki Amar from Morocco with CASHPLUS, and Moulayé Tabouré, with Ivory Coast’s Anka. 

Baobab and Francophone Africa 

We have invested in ten startups across the region, spanning Morocco, Senegal, Togo, Guinea, and, most recently, Cameroon and Ivory Coast. Join us for our upcoming virtual Demo Day on July 24th, from 15:00 to 16:30 BST, to watch them pitch. 

Moreover, our very own Managing Partners, Arthur Chupeau and Niama El Bassunie, are also proudly from Cameroon and Morocco, respectively. El Bassunie’s startup, WaystoCap, caught the attention of Y Combinator (YC) in 2017, and she successfully took it through to acquisition in 2021. WaystoCap is an online B2B marketplace for businesses in Africa to buy and sell goods, highlighting the conducive macro environment in Francophone Africa by scaling operations across five markets, including Benin, Burkina Faso, Côte d’Ivoire, Morocco, and Togo. 

Their insights and on-the-ground expertise strengthen our belief in the potential and opportunities within Francophone Africa, allowing us to identify the right Founders and Business Models in the region.  

We Are Not the Only Ones Taking Notice 

The tech investment landscape in Francophone Africa is attracting significant attention. In 2023, the total number of fundraises in the region grew by approximately 15% year-on-year. According to Partech’s 2023 Africa Tech Venture Capital report, startups in Francophone Africa accounted for an impressive 15% of all equity raised across the African tech ecosystem—an increase of threefold compared to five years ago. 

When excluding the Big 4 (Kenya, Nigeria, South Africa, and Egypt), Francophone Africa’s achievements are even more noteworthy. The region represented nearly two-thirds of all equity raised among the 50 other African countries, a substantial rise from just under 40% in 2022. This growth, almost 1.8 times higher than the previous year, underscores the region’s emerging growth in the tech sector. 

It’s Only a Matter of Time (and Capital) 

Looking ahead, we believe Francophone Africa will continue to attract substantial investment and produce world-class tech companies. The combination of a young, tech-savvy population, supportive government policies, and improving infrastructure creates a compelling investment landscape. Baobab Network is committed to supporting the next generation of tech entrepreneurs in Francophone Africa, and we encourage investors to explore the opportunities in this promising region.